Continuing instability and conflicts in parts of the Middle East and Africa are affecting Etihad’s business, the airline’s president and chief executive, James Hogan, has admitted.
Speaking at the International Air Transport Association (IATA) Aviation Day in Abu Dhabi, Hogan said that despite all the positive measures taken by the airline to compete and grow its business, challenges existed in operating in the Middle East and Africa, the region which forms the focus of the two-day IATA Aviation Day conference.
“The ongoing instability and conflicts in parts of the region continue to affect the performance of the business,” Hogan said.
“So too do security concerns deterring leisure travellers, as well as rising infrastructure costs, increasingly crowded skies and austerity measures impacting consumer spending.
“Like rest of the industry we are not immune to these challenges, but collectively, as an industry, not in isolation, we can work towards finding solutions and come up with a framework that is both workable and competitively feasible.
“It is here that industry cooperation can be mutually beneficial and provide a win – win situation for all.”
Etihad is the national airline of the United Arab Emirates. Its major rival, Dubai-based Emirates Airline, a commercial partner of Qantas, is located very close geographically, as is Doha-based Qatar Airways.
Hogan said collaboration within the aviation industry was vital in driving change and giving consumers the benefits they deserve.
He said Etihad Airways’ successful partnership strategy could become a model for other players, telling the audience that partnerships and collaboration were the most tangible way to grow in today’s highly competitive business environment, providing consumers with greater choice and connectivity.
“Ways of doing business globally have changed over the years and aviation, like many other industries, must adapt and change.
“In union there is strength and a shared vision. At Etihad Airways we have seen the results of working together which go well beyond commercial benefits.
“Industry observers originally questioned our equity investment strategy. Three years on, we have proved the sceptics wrong. Our organic growth has been supported by successful codeshare partnerships, minority investments in selected airlines around the world, and deep commercial agreements with competitors and non-competitors – all to provide an enhanced global offering to the travelling public.”
Etihad Airways currently operates a fleet of 119 aircraft flying almost 15 million passengers annually to 113 passenger and cargo destinations around the world. With a family of seven equity partners, Etihad Airways has a combined strength of over 330 unduplicated destinations, more than 700 aircraft and 110 million passengers. With the 49 codeshare partners, the combined strength is 600 cities globally.
“No airline can ever achieve scale of such proportions by going out alone,” added Mr Hogan.
“Working together brings alignment across our partners which has to be good for the consumer. Business and leisure travellers are demanding. They want, and rightly so, choices in product, service, loyalty rewards, network, schedules, convenience and consistency.
“Through cooperation we also enjoy significant cost reduction opportunities such as joint procurement of assets, services and supplies. We recently concluded an innovative financing transaction involving some of our equity partners which raised US$700 million across international markets to fuel growth collectively, a clear endorsement of our business model.”
Edited by Peter Needham